76-14-B6
- Main Page \ Reagan Radio Commentaries \ 1977
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Government Spending[edit]
Transcript[edit]A few months ago the new House majority leader observed that if unemployment was reduced to four-and-one-half percent, the budget would not only be balanced, we'd have a surplus. Just once I wish a member of Congress would turn that around and say, "If the budget was balanced, unemployment would be down to four and one-half percent, or maybe only three and one-half percent. We've had deficits for 17 of the last 18 years. In the early '70's we had a 70 billion dollar total deficit over just three years, unemployment in those three years averaged less than five point three percent. In other words, full employment didn't prevent deficit spending. We have more people working and paying taxes this year than at any time in our history, yet we are running an annual deficit of somewhere around 50 billion -- give or take a few billion. And that deficit is not caused by unemployment. Spending by government just rises faster than government revenues do. During those years from '68 to '77, Federal revenues increased 128 percent, but expenditures went up 140 percent. And, we can't blame the cost of living because that only increased half as much. That period, '68 to '77, included good times and bad. In 1968 unemployment was only three point six percent (3.6). The only term we can use is "runaway" to describe government expenditures over recent years. Federal spending on health care increased 261 percent; interest on the national debt, 206 percent, revenue sharing, 2,367 percent and education, 137 percent. All of these, plus many others, increased far more than the cost-of-living index. But, strange to say, the one expense targeted constantly for trimming, by so many of those who are responsible for the increases in spending, the defense budget, has only increased 27 percent in these last 10 years. Which means, in constant dollars, spending on our national security has actually decreased. But the social spending programs, the re-distribution of your earnings to others, have almost all increased in cost faster -- some twice as fast. It is time that Congress be denied the right to pass off this deficit spending as a natural phenomenon spawned by a recession for which they also take no blame. Economics may be an inexact science, but it isn't that inexact. The permanent debt ceiling -- I'll pause while you laugh -- is 400 billion dollars, but we passed that a long time ago and are on our way to 700 billion. In session after session the Congress meets and solemnly approves a -- QUOTE -- "temporary" -- UNQUOTE -- debt ceiling to cover whatever deficit they have in mind. What makes this doubly frustrating is that the inflation, caused by deficits, is then counted on, by those same Congressmen, to bring in extra revenues. Thus they are encouraged to adopt new spending programs. A spokesman for the Congressional budget office predicted these inflation-generated revenues would give us a balanced budget by 1982. Don't you believe it. Those estimated revenues will be earmarked for spending long before they are collected. For every penny added to the cost-of-living index, the government will get a penny-and-a-half. Inflation is good business.... for government. This is Ronald Reagan. Thanks for listening. |
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